Forum Moderators: buckworks
My prices on many items are less than this other retailer's, and I'm wondering just how many sales I lose because of the perception that it may be too good to be true. My cart abandonment rate is higher than what it should be, although I'm sure there are other contributing factors.
Has anyone ever considered raising prices to appear to be more reputable?
I spent nearly 30 years as an advertising photographer. In advertising, perception is everything. I positioned myself as a premium photographer, and I got premium jobs. I also lost a lot of jobs because others came in much cheaper.
After all that time, guess who made more money? It wasn't me.
When I price an item, I use Google Products to compare prices. I'll price myself above the retailers who are ridiculously low, and above those who seem to be small operations, so that my competitors are the large discount retailers.
I don't know if that's smart or not. On the one hand I'm giving customers the same low prices they'd get at the discount retailers while giving them better service. On the other hand, customers may see the low prices, not know who I am, and figure I'm some guy doing this after school.
...then turn around and buy from a discounter who never answers their phone.
It also happens that people call in to places which are or seem to be more reputable for customer service issues or questions,
...then turn around and buy from a discounter who never answers their phone.
But that is really nothing new. 30 years ago people would browse the high end stereo stores for info, then buy from some discounter down the street, who is out of business 6 months later.
It has always been a problem, but as long as people are willing to operate at a loss and people buy it, it will never change.
I too wish I had the answers on pricing. We are lucky in that most of our products we make ourselves and we don't wholesale. So I don't even have to worry about someone beating our price, because there isn't anybody else. But there are similar products that compete. I often raise prices out of necessity... I don't want to, because I know people don't like it. But I know that if I don't, there won't be a business, period. On one hand I will have people complain about prices being high. Then other people will actually tell me they think our prices are too low for what we offer. So I guess the message there is... it all depends who the person is. I'd rather sell less stuff for a decent price then kill myself to sell twice as much and make the same amount. So the trick seems to be, how do you attract and satisfy those people who think the prices are fair. 'Made in America' is one thing that helps. Customization of products. Tech help that goes above and beyond the majority of sellers out there. Being part of the community and letting people know I'm a real person and not just a faceless company reselling Chinese goods... I think the more people can think of you as a real person, just like them... The harder time they will have thinking of you as simply a price on a site. But over all, I often find that raising prices isn't the terrible thing you might assume it will be. Most of the time people just keep buying. I think it's easy to take a few comments about high prices and have that stick in your mind. When in reality, there's probably a lot more people that have no problem with the prices.
No matter how low I price my products, there's always someone selling for less. I'll get calls where the person says that somesite.com has the product for $X less. I'll say, "that's a good price, but I can't lower mine because I'll lose money." Most of those people wind up buying from me.
I just worry about the possibility that being low priced may be scaring people away.
Then there is also the perception that a high priced item is high quality. Just think about Mercedes cars. In the past this was true (more or less), but nowadays they are manufactured having the same quality issues as any other car. But people still believe that they are worth more than others.
To differentiate from those that are selling below your price point, why not offer something they can't? Maybe a guarantee or a bonus like the "99 things to do with this widget" report? It could add tremendous value and that would mean higher price.
Good luck and keep us updated.
That said, I suspect there's the perception that a low-priced seller may not be reputable. The Catch-22 is that, if I raise my prices, I'll be more expensive than some of my well-known competitors and if I keep my prices low, I'll be regarded as less reputable than those competitors.
I think the only solution is to get a more recognized name. At that point raising prices could be justified.
